Cisco's quarterly sales rose 24% to a record $18.5B, and the company is eyeing $9B in AI revenue.

**Key takeaways**

- Cisco posts record $18.5 billion in revenue, up 24%.

- AI infrastructure revenue forecast climbs to $9 billion.

- Networking growth accelerates as profitability faces new pressures.

Cisco Systems (NASDAQ: CSCO) delivered record quarterly revenue of $18.5 billion, a 24% increase from a year earlier, while raising its fiscal 2027 AI infrastructure revenue forecast to $9 billion as demand for artificial intelligence networking equipment accelerates.

According to Cisco's official earnings release, adjusted earnings reached $1.40 per share, up 40% year over year. The results exceeded the approximately $18.1 billion revenue expectation highlighted in the company's earlier earnings preview.

The stronger outlook marks another step in Cisco's transformation from a traditional enterprise networking supplier into a major beneficiary of hyperscaler AI spending, where companies including Broadcom are competing for expanding infrastructure budgets.

**Cisco Raises AI Revenue Target to $9 Billion**

Cisco now expects $9 billion in AI infrastructure revenue from hyperscale cloud customers during fiscal 2027. That is up from its previous forecast of $7.5 billion and more than double the roughly $4 billion it generated in fiscal 2026.

The revised figure represents a $1.5 billion increase in expected annual AI revenue, suggesting that demand for high-performance networking remains stronger than management previously anticipated.

The company had already secured $9.3 billion in AI infrastructure orders during fiscal 2026, following an earlier surge in AI orders that helped establish networking as one of its fastest-growing opportunities.

CEO Chuck Robbins described the current expansion as the early stages of a multiyear networking supercycle, reflecting the increasingly complex infrastructure required to connect thousands of AI accelerators.

Unlike AI cloud providers, which must finance enormous computing facilities, Cisco primarily captures demand by supplying the networking technology that connects those systems.

**Record Networking Growth Drives Cisco Earnings**

Cisco's networking business generated $11.13 billion in quarterly revenue, an increase of 43% year over year, and accounted for approximately 60% of total company sales.

Product revenue climbed 32% to $14.67 billion, while services revenue rose just 1% to $3.85 billion. Security revenue grew 7%, collaboration increased 8%, and observability advanced 2%.

Cisco also raised its full-year revenue guidance to $74.8 billion–$75.8 billion and its adjusted earnings expectations to $5.47–$5.53 per share.

The stronger results contrast with mounting concerns over AI infrastructure debt, as cloud operators and data-center developers face increasingly expensive expansion programs.

**What Does the $9B AI Forecast Mean for Cisco Stock?**

Despite accelerating sales, Cisco faces a profitability challenge. Its adjusted gross margin declined to 65.6% from 68.1% a year earlier, indicating that rapid hardware growth does not automatically translate into stronger margins.

That distinction matters as investors reassess whether the broader AI spending boom can generate sustainable returns across the technology supply chain.

Cisco's forecast also depends on hyperscalers maintaining their investment in AI networking. Slower cloud infrastructure spending, rising component costs, or increased competition could affect future revenue and profitability.